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GLOBAL ECONOMY vsTRAVEL INDUSTRY  THE GLOBAL ECONOMIC RECOVERY IS UNDERWAY, LEADING TO THE SLOW RETURN OF TRAVEL DEMAND.  FOLLOWING THE 2009 DECLINES, GLOBAL ARRIVALS WILL TAKE 3 YEARS TO RECOVER TO PRE-CRISIS 2008 LEVELS.  INCOMING TOURIST RECEIPTS WILL LAG BEHIND, TAKING 4 YEARS TO RECOVER IN FULL.

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REGIONAL PERFORMANCE FOR ARRIVALS Tourism Overview • Western Europe and North America were hit hard by the crisis. Arrivals will take 5 or more years to recover, as consumers will focus on other priorities over travel. • Eastern Europe was by far the worst hit by falling visitors, due to increased competition from Western European city break destinations, as well as suffering from the collapse of SkyEurope, taking capacity out of the market. • Middle East and Africa showed growth in arrivals of almost 3% over the only region to do so. This was largely due to significant discounting by hotels, increased low cost travel options such as LCCs and budget/mid hotels, coupled with the expansion of its schedule airlines globally. • Asia-Pacific suffered in 2009, but is predicted to show good growth in arrivals for 2010 compared to other regions. Solid business development and an increasing reliance on intra-regional visitors helped fuel this progress. Source: Euromonitor International / IMF

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• Improving transport links and an increasingly wealthy middle class enabled a growing number to travel, both for business and leisure in BRIC countries. • Favourable exchange rates in Brazil boosted trips to Europe and the US. Middle East are actively targeting Latin America, such as Emirates increasing its frequency to Sao Paulo and Qatar Airways newly operates route from Doha to Sao Paulo/Buenos Aires, highlighting the appeal of this market. MARKET SHIFTS Source: Euromonitor International / IMF

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• Indian travellers tend to go to countries with which they have long-established connections, such as Singapore, Malaysia, UAE, UK and the US. A raft of new LCC, both domestic and foreign including the local leader SpiceJet and new entrants such as flydubai, facilitated travel to these destinations, with the exception of the US. MARKET SHIFTS

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• Whilst outbound travel from Russia declined in 2009, it remains an important source market. The countries of the CIS are traditionally popular destinations for Russians, whilst the wealthy elite opt for the UAE and Western Europe. MARKET SHIFTS

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• In a world ever more focused on security and safety for travellers, some countries actively seek visitors that have close links to their own, usually in terms of religion or culture. • North African countries, such as Morocco and Tunisia, and Asian countries, such as Indonesia and Malaysia, are focusing on attracting GCC residents, with whom they share a common religious background. • Diaspora tourism is also highly resilient to the external shocks of the global economy. MARKET SHIFTS